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Nicki & Bobby

Direct: (502) 376-7797
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Are you behind on your mortgage payments or concerned that you might be soon?

Have you received a pre-foreclosure letter from your lender?

Have you already abandoned your property and is it still sitting vacant?

First of all, don''t be ashamed. Millions of homeowners are in your situation, many times through no fault of their own. A job loss, a serious illness or other circumstances can put you in danger of foreclosure.

The economic downturn has led to many homeowners being "under water" in their loans, meaning they owe more than their home is worth, making it impossible to refinance.

If you''ve become one of those millions, don''t panic. Foreclosure and its accompanying effect on your credit is not inevitable. There are many options out there and your circumstances may make one of those options feasible and desirable for you.

To keep your options alive, you need to communicate with your lender. Many homeowners have lost their homes to foreclosure without ever contacting their lender.

This would also be a good time to consult with a Tax Advisor or Real Estate Attorney. Nicki and Bobby are specifically trained to work with distressed properties and will be able to help you explore foreclosure options. Bobby also holds a Certified Distressed Property Expert designation.

Many lenders would rather not foreclose. They take a large financial hit on a foreclosure ($20,000-50,000+ on average). So in many cases, they''ll consider viable alternatives. Some of these alternatives may keep you in your home.

Loan Modification

While only certain homeowners will be able to take advantage of this alternative, it may be your best option because it keeps you in your home and typically results in the least damage to your credit.

Your lender may be willing to modify the terms of the loan, whether it''s reducing the principal, lowering the interest rate or other creative strategies to make the loan affordable for you. As part of the stimulus package, the U.S. government has programs to provide incentives for banks that use this strategy as an alternative to foreclosure.

Short Sales

This is the fastest-growing foreclosure alternative. Many lenders will allow a Short Sale when the home sells for less than the amount of the loan. This is attractive for lenders because they loose less money than in a foreclosure. Also, Short Sales generally take less time than foreclosures so the banks don''t have to carry the properties on their books as liabilities (house cleaning, lawn/snow service, trash removal, paying utilities, repairs, etc).

Short Sales are attractive for homeowners because the impact on their credit is far less than in a foreclosure. You may be able to buy another home in as little as two to three years after a Short Sale, compared with a typical seven-year wait after a foreclosure.

Short Sales are paperwork-intensive, and there are many, many details involved. If you''re considering this option, it''s critical to work with a trained real estate agent who knows all the steps required to successfully complete a Short Sale.

Keep in mind that no matter which option you choose, there may be tax and other financial consequences. You should consult with a tax advisor or legal expert.

Short Sale Video -

Myth #1 - The Bank Would Rather Foreclose than Bother with a Short Sale - This is one of the most common misconceptions. The reality is that banks do not want to foreclose on your property because the foreclosure process is incredibly costly. Banks, investors, and even the federal government have all publicly stated that if a person is qualified for a short sale, the deal needs to be considered. Overwhelmingly, banks receive more on their investment through a short sale than a foreclosure.

The qualifications for a short sale include:

1. Financial Hardship - There is a situation causing you to have trouble affording your mortgage.

2. Monthly Income Shortfall (You have more month than money) - A lender will want to see that you cannot afford or soon will not be able to afford your mortgage.

3. Insolvency - The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

Myth #2 - You Must Be Behind on Your Mortgage to Negotiate a Short Sale - While this may have previously been the case, today lenders are looking for verifiable hardship, monthly cash flow shortfall, or pending shortfall and insolvency. If you meet these three requirements and believe that you soon may be unable to afford your mortgage, act immediately. Any delay could limit your options. Do not wait until the countdown clock to foreclosure has started and you have even less time left.

Myth #3 - There is Not Enough Time to Negotiate a Short Sale Before My Foreclosure - This is a myth that probably hurts homeowners the most. Many do not realize that foreclosure is a process and that there is time to make decisions that may result in better outcomes. The foreclosing party in most cases a lender can stall a foreclosure up to the final day of the process. Today, many lenders will stall a foreclosure with as little as a phone call from you explaining that you are trying to sell and almost all lenders will stall a foreclosure with a legitimate contract. For real estate professionals who understand foreclosures and short sales, there is time available until the foreclosure process is complete.

Foreclosure (Cash for Keys)

One of the biggest problems in foreclosures is that homeowners sometimes physically damage the property, or even sell some of the fixtures, before leaving. Needless to say, this is not a good idea. It may expose the homeowners to financial and legal liability. It also makes the properties much more difficult to sell.

To prevent this, some lenders offer a program called "Cash for Keys." The homeowners receive a check for vacating the property within a certain time period and leaving it in good condition. If you have no alternative other than foreclosure, you should ask the bank about this option.

Tips From HUD
The U.S. Department of Housing and Urban Development has 10 tips for avoiding foreclosure:

  1. - Don''t ignore the problem.
  2. - Contact your lender as soon as you realize you have a problem.
  3. - Open and respond to all mail from your lender.
  4. - Know your mortgage rights.
  5. - Understand foreclosure prevention options.
  6. - Contact a HUD-approved housing counselor.
  7. - Prioritize your spending.
  8. - Use your assets.
  9. - Avoid foreclosure prevention companies.
  10. - Don''''''''t loose your house to foreclosure recovery scams.


For more information please contact Bobby or Nicki Vormbrock at (502) 376-7797 or email It is also recommened that you contact your lender or loan servicer, a real estate attorney and tax professional for more advice. Should you choose to work with Nicki, Bobby or RE/MAX Alliance you may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender or servicer. Nicki Vormbrock, Bobby Vormbrock or RE/MAX Alliance is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our services, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating. While we may communicate with your lender, you may continue to communicate with your lender or servicer if you desire.

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